Economic and Financial Affairs Commissioner Olli Rehn announced on Tuesday (8 June) at a press conference following the Ecofin Council in Luxembourg that the Commission has "doubts" about the Bulgarian budgetary statistics and that a "methodological mission" will be sent to Sofia shortly to assess the situation.
The Commission's concerns are related to two aspects. First, Brussels regrets having "only belatedly been informed by the Bulgarian authorities about sizeable revisions in the budgetary outlook," Rehn's spokesperson told journalists in Brussels yesterday (9 June).
This already "constitutes a violation of treaty obligations". Second, "the Commission (still) lacks information on why Bulgaria has revised its planned 2010 budget from a balanced budget to a deficit estimated at 3.8% of GDP within just a few weeks, even though the macro-economic scenario remained unchanged, or was even improved during that time," explained Rehn's spokesperson, Amadeu Altafaj Tardio.
In April, the Commission started an excessive deficit procedure against Bulgaria after reviewing 2009 budgetary figures provided by Sofia. Bulgaria's deficit for that year was revised to 3.9% of GDP instead of the previously announced figure of 1.9%.
The Commission did, however, stress that the excessive deficit could be "qualified as exceptional as it results from a severe economic downturn".
But when Bulgaria announced a hasty review of its 2010 forecast, alarm bells started to ring in Brussels. Indeed, in Bulgaria's convergence programme, which was assessed by the Commission in March, the country's 2010 deficit was estimated at 0% of GDP, with a slight surplus (0.1%) predicted for 2011.
In revised data later provided by Sofia, the forecast deficit for 2010 surged to 3.8% of GDP.
Rehn's spokesperson made clear that the analysis which will be carried out by the EU mission will be centered on "potential risks to passing excessive deficit data related to previously undeclared government contractual commitments".
The case resembles problems that arose over Greek budgetary data, which triggered speculation over the financial stability of Greece and the entire euro area (see 'Background').
Eurostat's new role
The "methodological" mission that the European Commission is about to send to Sofia signals the first application of auditing powers conferred to EU statistical office Eurostat following the Greek crisis.
EU economy ministers backed on Tuesday Commission proposals to upgrade Eurostat from a data collector to a sort of auditor of national public accounts (EurActiv 08/06/10).
"Though we will not have full-audit power, more like semi-audit power, we can send frequent technical missions to assess countries when there are suspicions of deviations," an EU spokesperson said.
